For the longest time, it has been the custom that electricity is pegged and sold in RTGS dollars. I recall how whenever there was a tariff update some people would wonder when payment in US dollars would be enacted. This, of course, did not mean that people could not purchase electricity using US dollars. They could but in an indirect manner. For instance, I could give you US dollars and you would purchase electricity for me using RTGS dollars in the form of EcoCash or from one’s bank account. Anyways, there is now a new development that is going to see US dollar payments for electricity (both prepaid and post-paid) now formally possible.
The Latest Communique From ZETDC
“PAYMENT OF BILLS AND PURCHASE OF ELECTRICITY IN FOREIGN CURRENCY
The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) would like to advise its valued customers that it is continuously reviewing its processes and procedures in an effort to bring convenience to consumers. The power utility has introduced a system where all post-paid customers can optionally settle their bills in foreign currency at the prevailing bank rate in line with the multi-currency regime. The system also allows prepaid consumers to purchase electricity tokens in foreign currency at the prevailing bank rate hence availing more transacting options to its valued stakeholders.
ZETDC is leveraging on the multi-currency regime to adequately fund its operations, maintain its infrastructure as well as procure spares and equipment to stabilise the electricity network. The revenue that will be realised in a foreign currency will also be channelled towards the procurement of transformers to grow the network as well as reconnect customers who have been affected by the scourge of theft and vandalism.
STAKEHOLDER RELATIONS (11/12/2020)”
Implications Of This New Development
I am sure this is a welcome development for most people who were looking to buy electricity using US dollars. Actually, most people were struggling to get RTGS dollars – an issue that has been affecting many people. Thus there is now the convenience of using US dollars. However, it might not be as convenient in some sense and I will explain why.
Buying in US dollars will entail buying electricity from physical outlets. These are places such as ZETDC outlets, supermarkets, and the like. You do know this introduces quite some issues. For instance, queues and how about those who live far away from such outlets? After all, the most convenient scenario is to able to buy electricity from anywhere and at any time. Having to deal with physical cash will limit people in many ways.
I am yet to know if there will be an option to make online payments using foreign currency accounts. There have been options all along you can use to buy electricity whilst paying with PayPal, Visa, or MasterCard. For instance, you can buy electricity online that way on the Zim Price Check platform – click here. That would be greatly convenient but not many people have such accounts. In fact, I have heard most people complaining about charges involved when transacting using foreign currency accounts. The reality is the vast majority of people do not have foreign currency accounts.
Brief Look At The Exchange Rates Implications.
At the time of writing this article, the official interbank rate is ZWL$81.86 to US$1. I wrote an article on the recently announced new tariff structure. I will look at the RTGS dollar prices there to factor in the interbank rate.
Under the new tariff structure, the first 200 units cost roughly ZWL$920, whereas the first 300 units cost about ZWL$1786. Using an interbank exchange rate of ZWL$81.86 this means that will be about US$11.20 and US$22 respectively. Let us examine something here, which is cheaper? There are some variables to look at.
If you have easy direct access to RTGS dollars i.e. not have to buy them then buying your electricity in RTGS dollars seems the best option. If you have direct access to US dollars, in the same, then it means if you can then exchange them into RTGS dollars via alternative means you would get a better deal. Take for instance the first 300 units: their US dollar value is roughly US$22 (using today’s interbank rate).
If you exchange US$22 for RTGS dollars on the black market you will get something like RTGS$2200 (supposing you got it at RTGS$100 – black market rate varies). After getting that amount you can then purchase the first 300 units (for RTGS$1786); you will have some change left over. Ultimately you will have to weigh the merits of your context since what is cheaper to one might not be cheaper for the other.
If you wish to contact ZETDC for any queries or assistance you can use the details below:
Email: firstname.lastname@example.org or email@example.com:
WhatsApp ONLY: +263719219 977